This week: The market did not really receive any new impulses this week because of a lack of activity and because people in Europe are waiting for new contracts at the slaughterhouses for the month of November. Basically, the situation has been the same for weeks. Buyers and sellers alike are waiting for the big event that could drive the market situation and prices in any significant movement or direction. That is not happening at the moment because neither side is feeling much pressure to make big price changes. So for another week, everything will remain more or less the same. 

The raw material needed for the luxury sector remains scarce. The heavy male material, which finds its home in specialities for shoe leather or in the automotive industry, is waiting for a significantly increased kill, and the pressure on cowhides has not yet built up to the point where there would have to be emergency sales.

In the case of female goods, the price level has already been lowered to such an extent that large downward price changes are not necessary in the short term. On the other hand, owing to the difficult situation of furniture leather, price increases can hardly be considered realistic. The male product is clearly overvalued in international comparisons and as soon as the supply can no longer be absorbed so easily, decisions have to be made on how to deal with the situation.

From Asia this week we saw the same demand as we have seen for months. It was either for very low-priced goods, which are mainly used for gelatine and collagen production, or certain higher-quality raw material types, selected in order to test their usability and profitability. From Asia, the interruption caused by the early Chinese New Year (January 22) is now also making itself felt. Purchases for delivery before the holidays are hardly possible now. Nevertheless, it remains the case that the general global situation is not encouraging any tanner to take larger risk positions in raw material, even though many hide types are attractively priced.

The currency situation did not make overseas discussions any easier this week. Even those who expect a significant improvement in the coming year and might therefore be willing to risk some money on a market bet do not feel that they are under much time pressure to do so.

The next two weeks will be spent negotiating prices at the abattoirs for the coming month or perhaps even until the end of the year. It is clear that significant discounts would be necessary to protect oneself from potentially nasty surprises in the coming months. The only thing holding players back is the recurring fear of losing market share and capacity use. Definitely the worst of all justifications.

The kill: The kill stopped rising this week. This was certainly owing to the exceptionally mild weather and the significant increase in live cattle prices. Very warm temperatures are also expected again next week, which will not favour meat consumption either. So for the time being, at least for the short term, we can expect an interruption to the usual seasonal increase in beef production.

What we expect: We would be very surprised if the general standstill were to break as early as next week. The weaker US dollar weighs on calculations in Asia; meanwhile in Europe it would be a miracle if before negotiations with the slaughterhouses and clear signals from the leather industry, really new prices were to come about. In the following weeks, the market will have to find its bearings, because then the interruption of production over the Christmas holidays and the resulting adjustment of delivery schedules will have to be considered and included in the further considerations for the market situation.

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